The Communist Party of China (CPC) Central Committee's Proposal on the Formulation of the 11th Five-Year Plan (2006-2010) for National Economic and Social Development adopted by the Fifth Plenum of the 16th CPC Central Committee put forward many new thoughts, new ideas and new moves. This will definitely exert major influence on the new practice of China's economic and social development, the following 11 key words merit attention.

1. Adjustment of industrial structure

During the "11th Five-Year Plan" period, adjustment of the industrial structure includes two-layer meanings: One is raising the level of industrial technology.

The "Proposal" points out: To realize the adjustment of the industrial structure, "the key is to comprehensively enhance independent innovative capability, strive to master core technology and key technology, strengthen ability for the transformation of scientific and technological achievements and improve the overall technological level of industry".

Second is developing key industries. The "Proposal" points out that the important tasks for adjustment of the industrial structure is to develop advanced manufacturing industry, increase the proportion of the service trade and strengthen infrastructure construction for basic industries.

2. Cycling economy

The "Proposal" points out that developing a cycling economy is an important way for the building of a resources-saving and environment friendly society and realizing sustainable development.

Vigorously developing a cycling economy requires adoption of comprehensive measures: Changing the concept of development, rationally adjusting industrial structure and distribution, establishing a technical supporting system for the development of a cycling economy, perfecting the system and mechanism for promoting the development of a cycling economy, strengthening laws and regulations and a standard system for developing a cycling economy, organizing and launching a pilot project for the cycling economy and intensifying publicity and education.

3. Independent innovation

The "Proposal" notes that regarding enhancement of independent innovative capability as the strategic basic point of scientific and technological development and a key link in adjusting the industrial structure and changing the mode of economic growth, vigorously improving primitive innovative ability, integrated innovative ability and the re-innovative abilities for introduction, assimilation and digestion of technology.

Enhancing independent innovative capability requires: First, accelerating establishment of a technological innovative system that takes enterprise as the mainstay and market as the guide and features the integration of production, emulation and research. Second, improving the market environment for technical innovation. Third, implementing policies related to finance, taxation, banking and government procurement for supporting independent innovation, and perfecting an incentive mechanism for independent innovation. Fourth, making proper use of global resources of science and technology. And Fifth, strengthening protection of intellectual property rights (IPR).

4. Regional coordination

The "Proposal" points to the need of carrying out development of the western region, revitalizing northeastern old industrial bases, promoting the rise of the central region, encouraging the eastern region to take the lead in development, so as to form a pattern in which the eastern, central and western regions act together, take advantage of each other's strengths, promote each other and enjoy common development.

The "Proposal" points out the way for implementing the strategy of regional development mainly in three aspects. First, strengthening regional coordination and interaction mechanisms, which include the market mechanism, cooperation mechanism, mutual-aid mechanism and supporting mechanism. Second, clearly defining the functional positions of different regions.

Carrying out optimized development, selected point development, restricted development and prohibited development in accordance with the populations, resources, environment bearing capacity and development potentialities of various regions. Third, expediting a sound development of urbanization. Vigorously and steadily pressing ahead with urbanization in line with the principles of advancing in an orderly and gradual way, saving lands, engaging in intensive development and making rational arrangement.

5. Expanding domestic demand

The "Proposal" points to the need of further expanding domestic demands, adjusting the relationship between investment and consumption, and increasing the role of consumption in boosting economic growth. The contribution rate of China's consumption to the growth of GDP has witnessed a continuous sharp drop in recent years, the growths of investment and consumption are inharmonious.

During the "11th Five-Year Plan" period, China will focus its efforts on expanding consumption demands from four aspects, and give further play to the role of consumption in pulling along economic growth. First is to change the situation of the sluggish rural consumption through increasing farmers' incomes, intensifying the government's public services to rural areas and accelerating the pace of urbanization, etc.; second is to intensify efforts in regulating income distribution through raising the income levels of medium- and low-income earners and guide urbanites to expand consumptions; third is to gradually improve the country's social security system, so as to relieve consumers of their "worries" about consumption; fourth is to improve the consumption environment and thus guarantee civilians' consumption safety.

6. Boosting "four new -izations"

During the "11th Five-Year Plan" period, the process of the "four new -izations" characterized by industrialization, urbanization, marketization and internationalization will be fully accelerated, and the Chinese economy will thus release tremendous vigor.

Acceleration of industrialization refers to the fact that currently the output of China's principal industrial products have ranked first in the world, the country is becoming the world's largest industrial production base. Faster urbanization refers to the rapid growth of China's urban population. Quickening marketization refers to the fact that China has become one of the most open markets in the world, as well as a market which witnesses the fiercest competition in the world, of the world's top 500 enterprises, 450 have entered into the Chinese market. Acceleration of internationalization means that the proportion of GDP in relevance to international capital increased from 25.4 percent in 2000 to 37.7 percent in 2004. Promoting the development of "four new -izations" provides an important condition for maintaining the rapid development of China's economy.

7. Building socialist new villages

The "Proposal" clearly states: "Building socialist new villages is a major historical mission in China's modernization process."

The target and requirement for building socialist new villages can be summed up as follows: Developed production, well-off life, civilized rural customs, a neat and tidy appearance of village and democratic management. Such scenarios give full expressions to the requirements for rural economic, political, cultural and social development under the new situation.

Building socialist new villages requires upholding the principles of "giving more to villages, taking less from them and breathing new life to them", and "industry nurturing agriculture and cities supporting villages", improving farmers' living quality, bringing about a relatively big change in the outlook of rural areas as a whole. Emphasis is placed on strengthening plans for the construction of villages and towns and improving the environment, and on the construction of new villages and towns; developing various social undertakings in rural areas, fostering new farmers; strengthening construction of rural democracy and legal system and construction of spiritual civilization and encouraging new social practices.

8. Deepening reforms

The "Proposal" has the following salient characteristic: Promoting the strategic adjustment of structures and social progress through intensifying reform efforts.

The many contradictions and problems currently arising in China are rooted in the fact that the reform is not in place and the system imperfect: The reason for the periodical fluctuations appeared in China's macro-economy lies in the fact that reforms of the macro-management system and the micro-operational mechanism are not put in place; the reason for the extensive mode of economic growth is directly related to the fact that the change of government functions is not in place, the finance, taxation and banking systems are imperfect and enterprise reform is not in place; and the serious waste and low efficient use of resources is directly related to the indistinct defined property right systems of land, water and important mineral resources and to the irrational formation of mechanism.

The "Proposal" has worked out plans in regard to the emphasis on deepening reforms: First is to vigorously press ahead reform of the government's administrative management system. Second is to uphold and improve the basic economic system. And third is to push forward finance, taxation and banking system reforms.

9. Raising the level of opening to the outside world

During the "11th Five-Year Plan" period, China's opening program is faced with a more complicated international environment and new requirements set forth by domestic development. Such being the case, we must raise the level of opening to the outside world. The "Proposal" clearly calls for implementation of a mutually beneficial and win-win opening strategy, this is a major guiding principle for balancing domestic development and opening to the outside world during the "11th Five-Year Plan" period and is a guideline for further and wider opening to the outside world. Carrying out the mutually beneficial and win-win opening strategy requires: First, accelerating the change of the trading growth pattern, actively developing foreign trade, optimizing the mix of import and export commodities, and striving to bring about a basic balance of imports and exports; second, continuing an active and efficient use of foreign capital, focusing efforts on improving the quality of the utilization of foreign capital and strengthening guidance to foreign-funded industries and regions; third, supporting qualified enterprises in "going global" and investing abroad in accordance with common international practices.

10. Public service

The "Proposal" particularly stresses the need to further change government functions, to concentrate major government energy on economic regulation, market supervision and administration, social management and the functions of various public services. During the "11th Five-Year Plan" period, public service is raised to an unprecedented height. In relevance to the reduction in the economic indexes, human and social indexes are added to the projected targets of the "11th Five-Year Plan", such as civilian-concerned employment, social security, compulsory education, public health and public security. And

11. Social development

The "Proposal" points out that development must be a scientific one, it is necessary to incorporate the building of a socialist harmonious society into the connotation of development, to coordinate and promote economic construction, political construction, cultural construction and social construction, and propel humans' all-round development. The words "social development are especially eye-catching in the "Proposal". While impelling economic development, it is essential to pay attention to the problems concerning social development, such as how should wealth be distributed, how interests be coordinated and how contradictions be defused. Regarding this, the "Proposal" clearly points out the need to begin with tackling the practical problem that involves the vital interests of the people, to lay more emphasis on the coordinated economic and social development, to speed up the development of social undertakings; greater attention should be paid to social justice, so that all people can share the achievements of reform and development; more attention should be given to the coordination of reform, development and stability and maintenance of social tranquility and unity.